Many businesses are considering VOIP for their telephone businees needs. Many don't know exactly when they should consider it an option for them. Many do not understand how it differs from regular telephone service and how the two differ.

Many companies are now beginning to look into alternatives to high priced telephone systems currently in use. They are realizing that there are huge benefits financially to those switching over to VOIP. They are realizing there is greater functionality with VOIP as well as cost savings and room for growth.

The simple basics of VOIP is that it uses high speed internet lines to carry voice traffic instead of telephone lines.

There are two basic technologies.

IP telephony runs over a local area network also known as a LAN. this is a very cost effective way for communicating within an organization. It allows voice transmissions between people within a company who are part of an internal network.

VoIP is carried over a wide area network also know as a WAN. VoIP can be used to transmit voice through a WAN (such as the internet) or carry voice over a public WAN (such as the Internet) or a private WAN, which provides enhanced security for communications.

Why would a business consider making this change?

Large companies currenly use PBX systems. This is a private phone system within an organization. Users work with a certain number of lines for all external calls.

Some companies use a cental office exchange service know as Centrex, which is basically a PBX in which all routing occurs not on a company's premises, but at the local telephone company.

Some use "Key systems", which are very small PBXs, designed primarily for small offices.

These systems all share the same problem. When it comes to long distance the costs are enormous. As more and more this becomes a global world, long distance becomes a major necessity and this means one thing...large long-distance bills, Coupled with this these systems are difficult to change or expand with company growth and are unsuited to support more technically advanced communications. Because these systems are based upon proprietary technologies, companies are limited to only what the phone companies provide.

VOIP services make this a thing of the past. As VOIP gains popularity among companies seeking more cost effective services these antiquated phone systems are slowing disappearing. Expansion of services will be a breeze because of the technology involved with VOIP.

Companies will benefit from reduced overall costs as IP-based voice technology can virtually eliminate toll calls. It also slashes the cost of making add-ons, moves and changes to the system.

Enhanced functionality. VOIP offers all the options that callers are used to using such as call waiting, caller ID, unified messaging, directory services and vertical-specific applications. In addition, VOIP is a standard, open protocol, allowing companies to build their own audio applications or purchase other applications that will come from software developers.

Easy Expanion. As your company expands and grows this cost effective system will allow for expansion with very little cost.

Easy To Use. With VOIP, employees wil have many options--they can use a VOIP phone that is identical to a regular desk phone or use a "softphone" which loads into desktops, laptops or PDAs as software. Added benefit is that they will be able to use their telephone number in any location.

In time VOIP networks will become even more usefull as it will be able to support the convergence of data, video and voice services. This will enable companies to be ready for a plethora of multimedia applications that are emerging from developers. VOIP technology will give guaranteed levels of reliability, quality of service and security.

VOIP is now a fully developed technology, providing companies with a valuable voice system today, and allowing for the latest technological advances that will develop in the future.

Companies need to get in on the ground floor to take advantage of all the new technology that is coming and the savings it will afford.

About the author:
Jean Sutherland is a technical writer for the popular website http://www.voip-place.com/where everything VOIP is discussed. She is also the owner of the successful website The Company Newsletter at http://www.thecompanynewsletter.comwhere you will find loads of free software, articles on marketing and common computer questions.